412 Charged In $1.3B Health Fraud Takedown, Largest In History

DETROIT, MI — The Justice Department said Thursday that it has charged 412 health-care providers — including 32 in Michigan accused of $218 million in fraudulent billings — with fraud in officials described as the largest-ever health fraud takedown in U.S. history. They are accused of $1.3 billion in false billings to Medicare, Medicaid and TRICARE, a health-insurance programs for military members and veterans, authorities said.

Those charged were in 41 federal districts and included 115 doctors, nurses and other licensed medical professionals. Among those charged in one Michigan case were nine people, including six doctors, who are accused of prescribing unnecessary drugs, some of which were sold on the street, and billing Medicare for $164 million for facet joint injections, drug testing, and other procedures that were medically unnecessary and/or not provided, according to a news release.

Of those charged nationwide, more than 120 defendants, including doctors, were accused of prescribing and distributing opioids and other dangerous narcotics, contributing to a nationwide opiate epidemic. (For more local news, click here to sign up for real-time news alerts and newsletters from Detroit Patch, click here to find your local Michigan Patch. Also, like us on Facebook, and if you have an iPhone, click here to get the free Patch iPhone app.)

U.S. Attorney General Jeff Sessions said those charged “put greed ahead of their patients” and that some have built their practices into multimillion dollar criminal enterprises.”

“Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start,” Sessions said in a news release. “The consequences are real: emergency rooms, jail cells, futures lost, and graveyards.”

Sessions said Thursday was a “historic day,” but just the beginning of the Justice Department’s work to “find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

Thirty state Medicaid Fraud Control Units participated in Thursday’s arrests. In addition, the U.S. Department of Health and Human Services has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed.

The number of medical professionals charged is particularly significant, the Justice Department said, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims.

Arrests in the “strike force” locations included:

• In the Southern District of Florida, 77 defendants were charged in connection with $141 million in false billings;
• In the Southern District of Texas, 26 defendants were charged in connection with $66 million in false billings;
• In the Central District of California, 17 defendants were charged in connection with $147 million in false billings;
• In the Northern District of Illinois, 15 defendants were charged in connection with $12.7 million in fraudulent billings;
• In the Middle District of Florida, 10 defendants were charged in connection with $14 million in fraudulent billings’
• In the Eastern District of New York, 10 defendants were charged in connection with $151 million in fraudulent billings;
• In the Southern Louisiana Strike Force, operating in the Middle and Eastern Districts of Louisiana as well as the Southern District of Mississippi, seven defendants were charged in connection $207 million in fraudulent billings.

Thursday’s enforcement actions also include cases and investigations brought by an additional 31 U.S. Attorney’s Offices, including search warrants served by investigators in the Eastern District of California and the Northern District of Ohio.

In the Northern and Southern Districts of Alabama, three defendants were charged for their roles in two health care fraud schemes involving pharmacy fraud and drug diversion.

In the Eastern District of Arkansas, 24 defendants were charged for their roles in three drug diversion schemes that were all investigated by the DEA.

In the Northern and Southern Districts of California, four defendants, including a physician, were charged for their roles in a drug diversion scheme and a health care fraud scheme involving kickbacks.

In the District of Connecticut, three defendants were charged in two health care fraud schemes, including a scheme involving two physicians who fraudulently billed Medicaid for services that were not rendered and for the provision of oxycodone with knowledge that the prescriptions were not medically necessary.

In the Northern and Southern Districts of Georgia, three defendants were charged in two health care fraud schemes involving nearly $1.5 million in fraudulent billing.

In the Southern District of Illinois, five defendants were charged in five separate schemes to defraud the Medicaid program.

In the Northern and Southern Districts of Indiana, at least five defendants were charged in various health care fraud schemes related to the unlawful distribution and dispensing of controlled substances, kickbacks, and services not rendered.

In the Southern District of Iowa, five defendants were charged in two schemes involving the distribution of opioids.

In the Western District of Kentucky, 11 defendants were charged with defrauding the Medicaid program. In one case, four defendants, including three medical professionals, were charged with distributing controlled substances and fraudulently billing the Medicaid program.

In the District of Maine, an office manager was charged with embezzling funds from a medical office.

In the Eastern and Western Districts of Missouri, 16 defendants were charged in schemes involving over $16 million in claims, including 10 defendants charged as part of a scheme involving fraudulent lab testing.

In the District of Nebraska, a dentist was charged with defrauding the Medicaid program.

In the District of Nevada, two defendants, including a physician, were charged in a scheme involving false hospice claims.

In the Northern, Southern, and Western Districts of New York, five defendants, including two physicians and two pharmacists, were charged in schemes involving drug diversion and pharmacy fraud.

In the Southern District of Ohio, five defendants, including four physicians, were charged in connection with schemes involving $12 million in claims to the Medicaid program.

In the District of Puerto Rico, 13 defendants, including three physicians and two pharmacists, were charged in four schemes involving drug diversion, Medicaid fraud, and the theft of funds from a health care program.

In the Eastern District of Tennessee, three defendants were charged in a scheme involving fraudulent billings and the distribution of opioids.

In the Eastern, Northern, and Western Districts of Texas, nine defendants were charged in schemes involving over $42 million in fraudulent billing, including a scheme involving false claims for compounded medications.

In the District of Utah, a nurse practitioner was charged in connection with fraudulently obtaining a controlled substance, tampering with a consumer product, and infecting over seven individuals with Hepatitis C.

In the Eastern District of Virginia, a defendant was charged in connection with a scheme involving identify theft and fraudulent billings to the Medicaid program.

In addition, in the states of Arizona, Arkansas, California, Delaware, Illinois, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, New York, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Vermont and Washington, 96 defendants have been charged in criminal and civil actions with defrauding the Medicaid program out of over $31 million.

These cases were investigated by each state’s respective Medicaid Fraud Control Units. In addition, the Medicaid Fraud Control Units of the states of Alabama, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Missouri, Nebraska, New York, North Carolina, Ohio, Texas, and Utah participated in the investigation of many of the federal cases discussed above.

The Justice Department said it has won or negotiated more than $2.5 billion in judgements and settlements related to matters regarding health care fraud.

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